UPSC CDS GS Economy Questions Part 2

The year 2014-15 (April December) witnessed a substantial decline in inflation. According to the Economic Survey, 2014-15, the Average Wholesale Price Index (WPI) inflation declined to 3.4% in 2014–15 (April-December) as compared to an average of 6% during 2013–14. The main factors causing moderation in inflation include both global factors as well as domestic measures. Global factors, namely persistent decline in crude prices and softness in the global prices of tradables, particularly edible oils and even coal, helped moderate headline inflation. The tight monetary policy helped contain demand pressures, creating a buffer against any external shock and keeping volatility in the value of the Rupee under check.